Creative Office Building in Santa Monica Secures Refinancing Deal as Silicon Beach Concept Gains Traction
By Alex Girda, Associate Editor
Holiday Fenoglio Fowler recently announced that it has provided a refinancing plan to The Luzzatto Company, Inc. and Welk Real Estate, Inc. HFF arranged $14 million for the property located at 2700 Pennsylvania Avenue, a creative office building in one of the country’s budding markets for tech-oriented tenants. With Microsoft as the latest company to express its interest in Silicon Beach, a number of office space owners are looking to recapitalize on their local assets in order to make sure that their properties will be among the ones that bring in the next big tech names to the area.
2700 Pennsylvania Avenue is a 62,000-square-foot creative office building that will benefit from its proximity to the upcoming Bergamot Station on the Expo Light Rail line, when it opens in 2015. The building has a 100 percent occupancy rate with its two lease holders Yahoo! and Jakks Pacific. HFF secured a seven-year, fixed-rate loan through Principal Real Estate Investors on behalf of Welk and The Luzzatto Company through its debt placement team led by Director Chris Vittetoe and Real Estate Analyst Steven Paskhover.
2012 was a positive year for Santa Monica’s office sector, with vacancy rates not exceeding an average rate of 10.3 percent. Q3 was by far the best timeframe for the area in terms of occupancy with only 9.6 percent of the total office space in the area being left unoccupied. Q4 saw a slight bounce in vacancies; Santa Monica finished 2012 with an average vacancy rate of 10 percent, according to data compiled by Reis Reports, a provider of commercial real estate performance information and analysis.
Market Data Courtesy of Reis ReportsTags: economy, leasing